A recent ruling by the Employment and Labour Relations Court has reinforced a principle that every employer in Kenya needs to understand: prolonged failure to pay an employee’s salary can release that employee from the obligation to keep reporting to work and can expose the employer to a constructive dismissal claim.
What the Court Decided
The case involved a driver who stopped reporting to work after going unpaid for an extended period. His employer treated this as desertion of duty and terminated his employment. The Court disagreed, finding that the employee’s absence was a reasonable response to the employer’s prolonged non-payment, not misconduct.
The Court held that where an employer’s continued failure to pay salary makes the employment relationship untenable, any resulting termination is treated as having been initiated by the employer, not the employee. This is the legal test for constructive dismissal: conduct by the employer that fundamentally undermines the employment relationship, leaving the employee with no reasonable option but to leave.
Financial hardship on the part of the employer was not accepted as sufficient justification for the non-payment.
Why This Matters for Employers
Employment is a reciprocal relationship. The employee’s duty to report to work and perform their duties is matched by the employer’s duty to pay agreed remuneration on time. When that reciprocity breaks down for a sustained period, courts are willing to treat the employment contract as no longer binding on the employee regardless of the cause of the employer’s cash flow difficulties.
For employers, the risk is not limited to reputational damage or staff attrition. It extends to compensation awards, notice pay, and the legal costs of defending a claim, all of which are avoidable with proactive HR and payroll management.
Practical Steps for Employers
1. Prioritise timely salary payments, and treat payroll continuity as a core business risk, not just an operational task.
2. Communicate proactively with employees whenever payment challenges arise. Uncertainty, not the delay itself, is often what drives disputes.
3. Document all communication and any agreed arrangements relating to salary delays or arrears.
4. Seek HR and legal guidance early if financial difficulties are likely to affect employee pay.
5. Address payroll challenges before they escalate into grievances, claims, or litigation.
The Bottom Line
Salary payment is not simply a back-office payroll function. It is a fundamental term of the employment contract, and courts are prepared to treat sustained non-payment as grounds for constructive dismissal. Employers who manage payroll and employee relations risk can proactively protect not only their people, but their business.
Amazon Fronts Ltd provides HR advisory, payroll, and workforce strategy support to help employers stay compliant and build resilient workplaces. Get in touch with our team to review your payroll and employee relations risk exposure.